House gives preliminary OK to tighter spending cap

There would be a tighter state limit on spending under a bill given preliminary approval Wednesday by the Texas House.

Rep. Phil King, R-Weatherford, added the spending limit as an amendment to House Bill 7, which, along with HB 6, seeks to tamp down on the practice of collecting fees or taxes for certain purposes and instead leaving them unspent to help balance the budget.

The bill requires a final House vote before going to the Senate for consideration.

The state constitution requires certain spending to be limited by economic growth, currently set by the Legislative Budget Board based on growth in personal income. The cap applies to state tax revenues that aren’t constitutionally dedicated to other purposes.

King’s amendment would require the board to base the cap on the lower of three things: revenue, growth in personal income or growth in population and inflation.

It was unclear whether the entire House was aware that it was adopting the spending cap because during the discussion of the amendment with King, GOP Reps. Drew Darby of San Angelo and John Otto of Dayton indicated that the cap would apply only to the growth of the general-revenue dedicated funds, which are the subject of the bill.

King afterward acknowledged the potential for confusion but said his amendment would put a new cap on the overall budget.

Gov. Rick Perry has called for a new spending cap to be placed in the state constitution that would limit spending to growth in population and inflation. A constitutional amendment would require approval by two-thirds of the Legislature to be placed on a statewide ballot for voter approval. HB7, as amended, would simply put the new cap into state law.